Lunch and Sterling Premium Paper
I was enjoying my pastitcio when the conversation turned to Sterling Premium, as it seems to more often than I’d like.
In the company of good folks at our local Greek eatery, things had been just fine until that point. I was smothering everything in sight with as many lemons as I could get my hands on, and I’d have been content to discuss anything under the sun. But they wanted to talk Sterling Premium.
So we did.
I wasn’t lunching with NewPage; I happened to be breaking bread (okay, pita) with another mill. They had heard about the truckloads upon truckloads of Sterling Premium that were lining up at the SPC docks. The skids of custom-sized sheets had been delivered four days after receipt of order and were already speeding through Heidelberg presses at 18,000 sheets per hour. My lunch companions weren’t amused and they wanted in.
I explained my decision, simply. It was a premium sheet at a #2 price. It was perfect for high-end direct mail.
They seemed to have known what I would say, and they came prepared. They suggested two options: one stock not quite as bright, and another that is brighter than Sterling Premium, the typical choice of flamboyant designers in off-register videos. I listened intently.
Would they allow Sterling Premium to drag their flagship into the mud or would they play up their secondary composition?
I voiced my opinion that NewPage’s Sterling Premium provides a great opportunity for both mills. It created a wedge between two grades. It’s differentiated. And for SAPPI, it’s a beautiful gift. I know that seems counter-intuitive, but follow my logic.
Considering the possibility that SAPPI could reduce the price of McCoy to compete with Sterling Premium, I offered a contrarian view (true to form). McCoy has an unparalleled name and reputation. Why would they burn up all that valuable brand equity in a giant bonfire? By my estimation, rather than compete with Sterling Premium on price, they should raise the price of McCoy and further differentiate it as “the best-of-the-best.”